Market Snapshot | January 25, 2023

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Corn futures are narrowly mixed at midmorning.

  • Corn futures trading narrowly around unchanged, despite strength in soybeans and wheat.
  • USDA reported a daily export sale of 100,000 MT to “unknown destinations” for the 2022-23 marketing year.
  • World Weather Inc. is still expecting some net drying to occur in Argentina for a while in February, which makes some of the rain falling now all the more important. The forecaster notes relief from drought is occurring, but the nation may not be done with challenging weather.
  • Ethanol production increased 4,000 barrels per day (bpd) for the week ended Jan. 20 to an average of 1.012 million bpd. That was down 2.2% from the corresponding week last year. Ethanol stocks jumped 1.68 million barrels – the largest weekly build ever – to a nine-month high of 25.082 million barrels.
  • March corn traded as high as $6.81, with initial resistance standing at $6.84 3/4. The session low of $6.73 3/4, was a breach of the 100-day moving average of $6.74 1/2, which will continue to serve as support along with the 20-day moving average of $6.69 3/4.  

Soybeans are mostly 2 to 3 cents higher, while March meal futures are around $1.00 higher and March soyoil is about 70 points lower.

  • Soybeans reversed overnight losses, led by strength in meal as recent Argentine rains may not have been enough to compensate for the losses caused by the worst drought in the last 60 years.
  • USDA reported a daily export sale of 130,000 MT to “unknown destinations” for delivery in the 2022-23 marketing year.
  • Recent rains in Argentina surpassed the “most optimistic” forecasts, said the Rosario Grain Exchange in a report on Tuesday, bringing relief to drought-parched crops, though “variability was extreme in coverage levels.
  • Brazil’s net drying in the south will be ongoing for the coming week and the impact will be mixed, creating an environment for improved early season soybean maturation and harvest progress, though center-west and center-south weather will remain wet, according to World Weather Inc.
  • Malaysian palm oil futures posted their biggest loss in over six weeks Wednesday in the first trading day after the Lunar New Year holiday. That’s pressuring soyoil.
  • March soybeans dipped as low as $14.78 1/4, breaching the 40-day moving average near $14.87, before bouncing. Initial support is at $14.74 1/2, while first resistance stands at the 20-day moving average around $15.02 1/2.

Winter wheat futures are posting moderate gains, with 6- to 10-cent gains in HRW leading the way. Spring wheat is mostly 3 to 8 cents higher.

  • Wheat futures are extending the previous session’s gains on continued bargain buying and questions about how much recent rains in the U.S. Plains have supported winter wheat fields.
  • World Weather Inc. notes the northwestern U.S. Plains, southern Alberta, Canada and southwestern Saskatchewan Canada will receive waves of snow in the next few days and by the end of the weekend snow cover will be sufficient to protect winter wheat from bitter cold expected this weekend into next week.
  • Brazil is poised to register record wheat shipments for January as local suppliers continue to fill the void left by major exporters Russia and Ukraine.
  • India will sell up to 3 MMT of wheat from government stocks to bulk consumers such as flour millers in an effort to bring down prices, according to government officials.
  • March SRW wheat firmed above the 10-day moving average near $7.39 1/4 and resistance of $7.42 1/2, with further resistance at $7.50 1/4. Initial support lies around $7.23 1/4.

Live cattle are lower with feeders mostly weaker at midsession.

  • Live cattle futures are posting mild losses after marking gains in the past three sessions, as traders await cash market direction.
  • Cash sources indicate packers are short-bought on near-term slaughter needs but will likely resist increasing cash prices as long as possible in hopes some feedlots will want to remove animals from feedlots amid stressful winter conditions.
  • Wholesale beef prices have begun their seasonal downturn with a $1.80 drop in Chois boxed beef prices on Tuesday, while Select fell $2.10. Movement rose to 138 for the day.
  • USDA’s Cold Storage Report will be released this afternoon and will outline frozen meat stocks at the end of December. The five-year average is a 4.7-million-lb. increase in beef stocks during the month.
  • February live cattle are trading narrowly, within the previous session’s range, with initial support lying at the 10-day moving average near $157.21. First resistance stands at the previous session’s high of $157.975.

Hog futures are mixed, with nearby contracts weaker and far-deferred months higher.

  • Lean hogs continue in a sideways consolidation pattern as traders wait for the cash market to indicate a seasonal low.
  • The CME lean hog index is down 2 cents to $72.11 (as of Jan. 23), which is the smallest daily decline in a while, though until the cash index signals a bottom, upside will be limited.
  • The pork cutout value rose 68 cents to $81.60 during Tuesday’s morning trade, but ended the day 86 cents lower at $80.60, with movement remaining solid at 360.3 loads.
  • USDA’s Cold Storage Report will be released this afternoon. The five-year average is a 3.2 million-lb. decline in pork stocks during the month.
  • February lean hog futures remain in the lower range of the previous session, with firm support lying around $76.32. Initial resistance is at near the 10-day moving average of $77.82.

 

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